Almost 40% of Quebecers would not have contributed to their RRSP before retiring, according to a survey. Unsurprisingly, around 30% believe that they will not be safe from financial precariousness once they have left the labor market.
These worrying statistics emerge from a Léger survey conducted on behalf of the Retirement Observatory and the Institute for Research in Contemporary Economy (IRÉC).
However, François L’Italien, coordinator of the Retirement Observatory, qualifies this observation. “RRSPs are actually a component of retirement savings and supplement retirement income. But from the point of view of financial coverage, it is rather the employer plans and the public plans that contribute the most ”, he tempers him.
Without RRSP or private pension plan
Nearly four in ten respondents (37%) indicated that they had not contributed to their RRSP in anticipation of retirement. People with an annual income of less than $40,000 are among those who contributed the least (69%). Those who say they are misinformed about the financial aspects of retirement also account for a large proportion (54%), as do respondents with a primary or secondary education (52%).
In addition, 38% of Quebecers surveyed say they do not have access to a private pension plan, especially those with incomes below $40,000 (67%).
“The fact is that 59% will be able to benefit from an employer plan, which is good news. However, what the survey does not say is the quality of these plans and whether they will be able to provide a decent and viable income in retirement”, stresses François L’Italien.
Financial precariousness and fear of retirement
Three in ten respondents (29%) believe they could find themselves in a precarious financial situation when they retire, particularly those with an income of less than $40,000 per year (51%), who are poorly informed about the financial aspects of retirement (45%), or who do not have a private pension plan (42%) or an RRSP (40%). Therefore, some could be forced to stay longer in the labor market, which, in the opinion of Francisco the Italian, is not a panacea.
Despite the looming clouds, retirement continues to have a positive echo among the majority of those surveyed (55%), especially among those who have access to a private pension plan, those with RRSPs and the wealthiest. However, this perception may not stand the test of reality if the income is not there and some retirees must ultimately decide to stay longer in the labor market or return to it.
“With the economic situation and the weight of inflation on retirement income, this could change the situation”, argues François L’Italien.
Situation of retirees
For their part, 84% of retirees surveyed as part of this survey mention that they are in a good financial position. On the other hand, 13% say their situation is bad, particularly those with incomes of $40,000 or less (30%).
Regarding the main sources of income, 84% of them receive benefits from public pension plans. In this bracket, retirees with incomes between $40,000 and $59,000 are particularly represented (97%). In addition, 63% of retirees surveyed receive amounts from their personal investments, and they are more numerous (81%) among those whose annual income is $60,000 or more.
Rethink tomorrow’s retirement
Seventy-three percent of those surveyed believe that pension plans need to be reformed in depth to better support the vast majority of people who will leave the labor market in the coming years.
A revealing statistic according to François L’Italien, who stresses that a real social debate must take place on this issue.
“The current system has reached its limits. There is an urgent need to rethink this model, because the retirement income component linked to the employers’ plan does not deliver the assets. This is a crucial time to make collective decisions and have a concerted approach. Without this, in 2040, retirees will have to continue working before they can access the freedom they yearn for, ”he warns.
VERY WORRYING DATA FOR THE FUTURE
►This survey was carried out by Léger with two samples totaling 1,200 respondents, during the month of July 2022.
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